Gallery owner beset by lawsuits and complaints

Kurt Lidtke's gallery in Pioneer Square, closed much of the past few weeks for vacation, is scheduled to reopen this week. Lidtke, accused of deliberately avoiding creditors and process servers, is seldom at the gallery.

Statement from Kurt Lidtke

For over fifteen years, I have worked to educate and support the legacy of the historical Northwest School through exhibitions, publications, lectures and museum donations.

The past year has been a challenge as I have been dealing with personal matters that have affected the gallery and that are now being resolved.

I look forward to our upcoming exhibition season which will explore the relationships and shared ideas of other artists that were and are not so well-known to the art community in general, but that helped the major participants achieve the status of what we have grown to know as the original, "Northwest Masters."

Source: Fax from Kurt Lidtke

When Kurt Lidtke opened his Pioneer Square art gallery in 1992, he seemed to have it all: charm, a background in art history and a résumé that included a stint at Foster/White, one of Seattle's premier galleries.

Now Lidtke's once-shiny career is unraveling in a spate of lawsuits and complaints that stretch from Seattle to Boston, San Francisco to Virginia.

Artists, other dealers, clients and even friends have sued Lidtke, complaining about his business practices. Dozens of people interviewed by The Seattle Times said they had disagreements with him. He was expelled from the Better Business Bureau in September 2002 — just six months after joining — for not responding to complaints. Two former customers asked the state attorney general to help them resolve problems with the gallery owner. At times, Lidtke fell thousands of dollars behind in state taxes.

"The thing is really bad," said attorney Richard Nelson, who sued Lidtke this summer on behalf of an elderly, disabled Seattle man who needed to sell paintings to pay for home care. "I've been practicing for 42 years, and this is up there with the worst."

Lidtke, 38, responded to repeated interview requests by leaving several after-hours voice-mails and sending a fax that said in part, "The past year has been a challenge as I have been dealing with personal matters that have affected the gallery and that are now being resolved. I look forward to our upcoming exhibition season ... "

The Seattle art business is mostly a polite affair, with artists and clients often doing business on handshake agreements with dealers they know and trust. Artists occasionally get burned by gallery owners who go out of business or skip town without paying. But a pattern of business practices like that at Kurt Lidtke Gallery is rare, based on a review of lawsuits against local galleries.

When a gallery has problems, there is a ripple effect, Pioneer Square gallery owner Greg Kucera said.

"I think the repercussion in the art community is similar to the Chinese art scandal," he said, referring to Thesaurus Fine Art, an Asian antiques store in Pioneer Square that closed down last year after a Seattle Times investigation exposed it for selling fakes. "It makes people recoil and look askance at all of us who have a good record."

In the mid-'90s, Lidtke often could be found in his Pioneer Square gallery, painting the walls, hanging pictures and happily chatting with clients about his mission — preserving the region's artistic heritage. He represented contemporary artists, and resold works by the higher-priced "Northwest Masters," painters such as Mark Tobey, Morris Graves, Guy Anderson and Kenneth Callahan.

Lidtke, like most dealers, sold works for a percentage of the proceeds. Standard commission for resales is around 30 percent; 50 percent is typical for living artists a dealer represents.

Lidtke met and married a TV news reporter, Lisa Papas — now at local Fox affiliate KCPQ-TV — and for a time, she helped run the gallery. The couple, who have two young daughters, moved into a house on Bainbridge Island in the late 1990s and opened a second gallery there.

These days, Lidtke, who is in divorce proceedings with his wife, is seldom at the gallery — now at 408 Occidental Ave. S. Most phone calls to the gallery are answered by Adam Merkl, who has worked for Lidtke for about three years.

One attorney accuses Lidtke of deliberately avoiding creditors and process servers, according to a lawsuit.

One of the largest court cases against Lidtke involved Richard Austin, a retired minister living in Virginia who inherited artworks from his mother. Austin sued earlier this year over the works, which Lidtke had agreed to sell in 1998. On Aug. 4, King County Superior Court found against Lidtke, who has since finished paying Austin $54,000 for Degas' sculpture "Danseuse au tambourin," $24,000 for Morris Graves' sumi ink painting "Marsh Duck" and $56,000 for the Matisse bronze sculpture "Nu accroupi, main droit à terre."

Questionable timing

In another case, Lidtke contacted Seattle architect Edward Cushman in early 2003 after learning that Cushman was advertising historical Northwest paintings for sale.

Lidtke recounted that deal in a July deposition:

"So I said to my assistant, 'Adam, we need to go in there and make sure he understands what he has on his hands so no one takes advantage of him, because he probably has some valuable artwork.' "

Over 80 years old and partially paralyzed by a stroke, Cushman did own some valuable work, paintings by Graves and Tobey. Cushman needed to sell them to help pay for home care, according to his nephew, Dr. Eugene Hurwitz of Atlanta.

Lidtke appraised Cushman's 1930s Graves painting "Bird on a Rock" for $65,000 and took possession of it in July 2003, according to court documents. He promised to sell the painting and pay Cushman $55,000, according to the lawsuit. He and Cushman signed a consignment agreement to that effect Sept. 12, 2003. But Lidtke had sold the painting a month before the agreement was signed, according to court records.

Hurwitz, who got involved on his uncle's behalf in February, said he discovered that Lidtke had sold the Graves shortly after he got it. Portland collector Richard Rubenstein sent Lidtke a check for $65,000 dated Aug. 13, 2003.

In a deposition two months ago, Lidtke maintained that he had not paid Cushman because the painting was undergoing extensive conservation work and that he didn't consider the deal complete. Not true, said Nelson, Cushman's lawyer. A Portland art conservator had approved the painting for immediate sale last August and "at that point Rubenstein wrote a check," Nelson said.

Details of the Tobey sale are similar.

Lidtke appraised "Pisces Borealis" for $50,000 in a typed statement to Cushman dated Feb. 25, 2003, and agreed to pay him $40,000 for it. But at the time of the appraisal, Lidtke had already sold the painting — at a higher price. Achim Moeller Fine Art in New York paid Lidtke $60,000, according to a Feb. 8, 2003 invoice.

Lidtke admitted in a deposition this summer that he had received the money and spent it "for gallery purposes."

Cushman won his case and was paid for both paintings out of proceeds from the sale of Lidtke's house, which sold for $710,000 last month.

A number of other dealers and artists have cited questionable dealings with Lidtke.

One of his coups as a dealer was representing the estate of well-known Northwest artist Paul Horiuchi. After Horiuchi's death in 1999, Lidtke promised to pay the family a percentage of any Horiuchi painting that he sold through his gallery, according to Paul Horiuchi Jr., the artist's son.

"He hasn't followed through on a lot of things," said Horiuchi Jr. "We haven't seen a penny."

The family allowed Lidtke to take on consignment one large six-panel screen, "Persuasiveness of Antiquity," valued at $70,000 by Lidtke, said Horiuchi Jr. That piece came up in another lawsuit filed in April by longtime Lidtke client Heidi Rabel.

Rabel loaned Lidtke $25,000 and was not repaid, according to her suit. But Lidtke contended in a letter to Rabel's husband that it was not a loan, but a percentage stake in the screen, to be repaid from her share of the profits once the screen was sold.

He told the Rabels the screen was in Japan and being considered for purchase by the Yamanashi Prefectural Museum of Art. But Horiuchi Jr. said he'd heard nothing about the potential sale. In an e-mail to The Seattle Times, museum curator Shingo Jinno said, "we didn't think about the purchase seriously. We don't have any budget for purchase now."

Rabel has declined to comment. The court ruled against Lidtke, and Rabel was repaid.

"Where's the piece?"

Prominent Portland gallery owner Laura Russo said that three years ago, she loaned Lidtke four stone sculptures by an artist she represents, for a show at his Bainbridge Island gallery. "I keep asking for them back and never really get to talk to him," she said. Lidtke closed his Bainbridge Island gallery last year.

Former Seattle art dealer Linda Cannon said she had a run-in with Lidtke in 1995, when he asked to show a small Graves painting from her gallery to one of his clients. Cannon said they agreed that if he sold the piece, priced upward of $20,000, they'd split the 20 percent commission; otherwise he'd return the painting.

"Time went by and he didn't return the painting or bring the money," Cannon said. "I kept calling him: 'Where's the piece? Where's the check?' I don't remember what he said, but I always felt when I hung up the phone: 'Damn, that guy is good.' "

After two or three months, Cannon got her then-husband, an attorney, to intercede, and Lidtke paid her.

Artists disappointed

Over the years, a number of artists have left Lidtke's gallery.

Northwest sculptor Philip McCracken, whose work is on display at the Museum of Northwest Art in La Conner, Skagit County, said he had been with the Lidtke gallery only a couple of years and quit last year.

"I did have some difficulties," McCracken said, citing poor communication, slow payment and issues of trust. "It just didn't fit, that's the main thing."

Lidtke's Web site still lists McCracken as a gallery artist.

San Francisco Bay Area artist Albert Smith says he's been calling for two years to retrieve his paintings from Lidtke or get paid. "There were 15 pieces, but they can only account for 10," Smith said. He values the missing paintings at roughly $10,000. "I've never gotten a check from him."

For California art collector and private dealer Robert Aichele, Lidtke's problems appeared sudden and unexpected.

"I never had a problem until recently," Aichele said.

In May 2002, Lidtke asked to borrow an important 1957 Tobey sumi painting, "Head," for a show. Aichele didn't want to sell the painting, which had been exhibited by Tobey at the Louvre in Paris, but agreed to loan it and consider offers.

Eventually, Aichele agreed to take $25,000 for the painting, but Lidtke has not paid him or returned the painting, Aichele said.

"I have called that gallery probably 40 or 50 times and haven't gotten a call back from Kurt," Aichele said. He did get a brief note from Lidtke and one message on his answering machine. Aichele, a retired music professor at California State University at Sacramento, filed suit against Lidtke last month.

Wife's wages garnisheed

Papas, Lidtke's wife, said she discovered the extent of the gallery problems when the couple started being served with lawsuits. Papas' wages at KCPQ were garnisheed to pay a judgment, which she says she learned about through the station, not her husband.